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Sauer Milk Inc. wants to determine the minimum cost of capital point for the firm. Assume it is considering the following financial plans: Cost (aftertax) Weights Plan A Debt 6.0 % 25 % Preferred stock 12.0 15 Common equity 20.0 60 Plan B Debt 6.2 % 35 % Preferred stock 12.2 15 Common equity 17.0 50 Plan C Debt 7.0 % 45 % Preferred stock 16.7 15 Common equity 12.6 40 Plan D Debt 14.0 % 55 % Preferred stock 17.6 15 Common equity 14.6 30 Compute the weighted average cost for four plans. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) Weighted Cost Plan A % Plan B % Plan C % Plan D % a-2.

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Financial Management, Finance

Category:- Financial Management
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